Modernising Agriculture, Key Tool to Poverty Reduction

from All Africa

New Times (Kigali)

NEWS

By Joseph Kamugisha
Kigali

As the Rwandan economy registers significant growth mainly in the subsistence agriculture sector, more efforts need to be invested in the modernisation of agriculture.

Over 90 per cent of the people in the country practice agriculture and this shows that their standard of living can be improved if the agriculture sector is modernized to have a high income among the people.

For several years, the government of Rwanda has been sensitizing the people about their agriculture activities, to change from subsistence farming to modern farming that meets the high demand of agriculture products in the foreign market. The government is also embarking on the policy of agricultural commercial farming that has seen the rise of the production of commercial crops like coffee and tea. Today, coffee and tea bring in high revenues in terms of the foreign exchange to the country and farmers than any other agriculture product. Based on the statistics from the agriculture ministry, over 50,000 families are involved in coffee cultivation whereas most of the tea plantations are owned by companies or cooperatives.

Yet there is high demand for the coffee at the international market; there is still a lot of effort needed to improve on its quality especially in the production of specialty fine coffee. The specialty fine coffee is a high grade coffee quality required at the international markets and the farmer or the country is assured of good prices if it can produce such quality of coffee. Other cash crops also fetch good foreign exchange if produced with high quality and in large quantities. But this depends on the inputs on and off the agriculture fields.

The development partners need to intervene at this point and help the government to strengthen and modernize the agriculture sector so as to fight poverty amongst the people especially those living in rural areas. Based on the past history of the country, Rwanda's difficult social conditions, and attempts to reduce poverty and achieve sustainable economic growth remain critical.

There has been a remarkable development in the agriculture sector since 2002 and it's encouraging. Strong growth in subsistence agriculture delivered substantial relief to Rwanda's poor and inflation was kept at a low level whereas large inflows of external assistance helped strengthen the country's official reserves position. Also to mention here is the substantive revenue measures that are implemented and constitute an important step toward fiscal sustainability, and meaningful actions are taken to strengthen the administration of the public finances and the banking sector. The government has had an active contribution to peace in the region and this is important for securing donor aid and improving the investment climate in the region. This shows that there is room for improvement and development in the country and the region as well.

However, in spite of the remarkable progress in the agriculture sector and the economy, continued implementation of strong policies is needed to maintain the micro and macro economic stability and to lay the foundation for sustained economic growth and poverty reduction. Besides agriculture, Rwanda's Poverty Reduction and Growth Facility (PRGF), is another important aspect that has to be handled with strict measures. The Poverty Reduction and Growth Facility is the basic facility for low income countries. It is intended that PRGF-supported programmes from the international organizations like IMF fund will in time be based on the country's owned poverty reduction strategies adopted in a participatory process involving civil society and development partners, and articulated in a Poverty Reduction Strategy Paper.

This is intended to ensure that PRGF supported programmes are consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty. It is estimated that PRGF loans carry an annual interest rate of 0.5 per cent and are repayable over 10 years with a 5 ½-year grace period on principal. It is thus, worth to say that support of the international community, through its technical and financial assistance will be very important to Rwanda's economic reconstruction.

More so, prudent economic management and satisfactory progress with structural reforms will facilitate such support.

Much progress has been made in implementing the structural reform agenda, but progress has been slow in some areas mainly because of capacity constraints.